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Diamonds & Specialty Minerals Summary for Dec. 15, 2014

2014-12-15 18:40 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score for Monday was a bleak 40-80-146. The TSX Venture Exchange fell 10 points to another low of 643 while polished gem prices were flat. Ken MacNeill's Shore Gold Inc. (SGF) fell 2.5 cents to 22 cents on 196,000 shares. The stock has avoided the worst of the tax-loss season thanks to it receiving environmental approval of its Star-Orion South project in central Saskatchewan. Still, Shore's inability to raise the $2-million needed for its mine is limiting its upside. Glenn Kelly's Orbite Aluminae Inc. (ORT) dropped two cents to 23.5 cents on 2.36 million shares. Orbite began December at 36 cents, but another delay at its high-purity alumina plant on the Gaspe peninsula has annoyed investors. Orbite traded at $5.69 in 2011, when the HPA plant was seen as a short term cash-flow project ahead of a big smelter-grade alumina and rare earth facility.

Robert Gannicott's Dominion Diamond Corp. (DDC) hit another six-year high of $21.13, intraday, but closed down 32 cents to $20.35 on 380,000 shares. Dominion's Ekati and Diavik mines are doing well, and the company now thinks it will have ample time to develop Jay, a big pipe at Ekati that could keep the mine running into the 2030s. (Dominion's prefeasibility study for Jay should be completed shortly.) Dominion paid just $400-million last year for BHP Billiton's 80-per-cent interest in Ekati, despite its hefty diamond inventory and substantial pot of cash. The modest payment seemed reasonable since the mine's best days were behind it and its reserves were due to run out in 2019. Dominion also paid $100-million for Jay and Ekati's Buffer claims -- the real reason Mr. Gannicott was enthused about Ekati. Still, seven years pass quickly when one is seeking government approvals for a big new open pit mine in Canada's North, and mothballing the Ekati plant and camp for a few years could be a project killer.

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